Mode-Hot 2011

The Case-Shiller Home Price Index for January is out and the dismal news for the Portland housing market continues.  This is not surprising as a couple of years of high unemployment is bound to have a serious impact, but depressing nonetheless.  



Here is a nice sortable table of the January numbers courtesy of the Wall Street Journal.  The headline numbers for Portland are a 7.8% decline since January of the year before and a 1.8% decline from december to January.



I do finally think that we are moving in the right direction in general, the jobs numbers have been good and overall US growth is pretty healthy, but it will take a while before we see these improvements make their way into property values.

And now for your monthly Case-Shiller update.  The December numbers are out and things continue to look grim for Portland (and the US in general).  With the federal new home buyer credit ending, the backlog of defaults and the continuing unemployment situation, the downward pressure on prices is still strong.

But, in some better news, consumer confidence is up sharply.

Portland hits a new low. And I am now ready to declare my relative optimism (that home values would end the year not much worse then when they started) too optimistic. Portland homes lost, on average, 7% of their value from November of 2009 to November of 2010. And since near in neighborhoods like mine have not done quite so badly, the suburban areas must be especially bad.



Anyway, here are the numbers as compiled by the Wall Street Journal:

Home Prices, by Metro Area

Metro Area	November 2010	Change from October	Year-over-year change  ↓
Atlanta	100.67	-2.5%	-7.9%
Chicago	119.57	-2.2%	-7.6%
Detroit	67.26	-2.7%	-7.1%
Portland	139.92	-1.6%	-7.0%
Phoenix	104.85	-1.1%	-6.4%
Seattle	141.57	-1.1%	-4.7%
Cleveland	100.12	-2.0%	-4.4%
Minneapolis	118.8	-2.1%	-4.4%
Charlotte	113.61	-0.4%	-4.3%
Dallas	114.88	-1.1%	-4.2%
Tampa	134.05	-0.8%	-4.0%
Las Vegas	100.59	-0.4%	-3.5%
Miami	143.81	-0.2%	-3.5%
Denver	125.02	-1.2%	-2.5%
New York	169.75	-1.0%	-1.7%
Boston	152.76	-1.0%	-0.8%
San Francisco	137.23	-1.2%	0.4%
Los Angeles	173.28	-0.4%	2.1%
San Diego	160.08	0.1%	2.6%
Washington	185.42	-0.1%	3.5%

Here are the numbers, nicely displayed thanks to the Wall Street Journal:

Home Prices, by Metro Area

Metro Area  ↓	August 2010	Change from July	Year-over-year change
Atlanta	109.09	-0.8%	-2.0%
Boston	158.35	-0.3%	1.5%
Charlotte	116.6	-0.4%	-3.4%
Chicago	126.7	0.4%	-2.9%
Cleveland	107	-0.3%	-0.4%
Dallas	119.41	-1.1%	-1.7%
Denver	128.57	-0.1%	-1.2%
Detroit	71.54	0.5%	-0.1%
Las Vegas	101.03	0.1%	-4.5%
Los Angeles	175.55	-0.4%	5.4%
Miami	147.47	-0.3%	-1.0%
Minneapolis	126.53	-0.3%	2.9%
New York	175.27	0.2%	0.1%
Phoenix	108.84	-1.3%	0.4%
Portland	147.02	-0.9%	-2.3%
San Diego	163.99	-0.6%	6.9%
San Francisco	142.83	-0.3%	7.8%
Seattle	145.93	-0.8%	-2.4%
Tampa	137.53	-0.5%	-4.1%
Washington	188.26	0.3%	4.8%

The news is bad: Portland is losing ground and in the top group for lost value. Not at all surprising given the unemployment situation.

Once again, farmed out to the Wall Street Journal, after all nothing much is happening in Portland to make a specific graph worthwhile - we have pretty much been holding steady since the beginning of 2009.  The sobering fact here is that this represents the tail end of sales influenced by the government tax credit, we may start to see another wholesale decline soon given the current moribund state of residential real estate transactions.

Home Prices, by Metro Area

Metro Area	June 2010	Change from May	Year-over-year change
Atlanta	109.74	1.7%	2.0%
Boston	157.83	1.2%	3.4%
Charlotte	117.24	0.7%	-2.7%
Chicago	124.9	2.5%	-0.1%
Cleveland	107.26	1.3%	0.8%
Dallas	121.14	1.0%	1.2%
Denver	129.19	0.7%	1.8%
Detroit	70.04	2.5%	0.8%
Las Vegas	101.77	-0.6%	-5.2%
Los Angeles	175.66	0.6%	9.2%
Miami	146.92	0.4%	1.1%
Minneapolis	125.91	2.5%	10.7%
New York	172.76	1.3%	0.2%
Phoenix	110.98	0.0%	6.0%
Portland	148.73	0.5%	0.2%
San Diego	163.82	0.4%	11.2%
San Francisco	142.55	0.3%	14.3%
Seattle	146.83	0.0%	-1.8%
Tampa	138.58	0.2%	-1.6%
Washington	185.77	1.7%	7.3%

Once again, I am farming this out entirely to the Wall Street Journal.  Portland's home values increased slightly from April and from the previous year, but what little improvement there was most likely is representative of the federal incentive programs.  Portland is, and always has been, unexceptional - middling in terms of increases and decreases in home values. Here is the WSJs chart:

Farmed out to Jeff Manning at The Oregonian:

Portland-area home prices jumped 1.8 percent in April from a month earlier, according to the S&P/Case-Shiller home price index released Tuesday.



It was a nice contrast to earlier this year, when the index in Portland was falling.



But experts warned against getting too optimistic over the April improvement, as it doesn't take into account the market slowdown that struck in May after the April 30 expiration of the federal tax credit for certain home buyers.



"Don't read too much into the increase," said Tim Duy, an economics professor at the University of Oregon.



Portland, like much of the rest of the country, enjoyed a last-minute frenzy of real estate dealing as the tax credit was about to lapse. But afterward came a lull.



In the 30 days ending June 13, there were 3,280 home sales or pending sales in the Portland area, a 24 percent decline from the prior four weeks, according to numbers compiled by Realty Trust Group. The average price of the sold homes was $282,910, a 5.97 percent decline from the earlier four weeks.

I agree with Tim, this should not be taken as a sign that the home market is appreciating in general. I still think, as I have for many months, that 2010 will not see significant appreciation nor depreciation. In fact, all indications are that my overall view of the economy - that 2010 will be a year stuck in a rut - is exactly what is happening. There is just no momentum causing airflow over the wings of the economy and providing lift.

Farmed out entirely to the Wall Street Journal's Real Time Economics Blog:

Home Prices, by Metro Area

Metro Area	March 2010	Change from February	Year-over-year change  ↓
Las Vegas	102.58	-0.8%	-12.0%
Detroit	67.66	-4.1%	-4.6%
Charlotte	114.74	-1.1%	-3.9%
Seattle	143.73	0.1%	-3.6%
Tampa	136.46	-0.1%	-3.5%
Portland	143.61	-0.1%	-2.8%
New York	169.42	-0.7%	-2.4%
Chicago	119.71	-2.3%	-2.3%
Miami	146.15	-0.9%	-1.7%
Atlanta	103.74	-1.8%	-1.3%
Phoenix	109.52	-0.5%	2.4%
Dallas	115.74	0.4%	3.0%
Boston	151.42	0.0%	3.8%
Denver	125.31	0.6%	4.1%
Washington	175.28	-0.7%	5.6%
Los Angeles	170.62	-0.7%	6.0%
Minneapolis	116.66	-2.7%	6.5%
Cleveland	103.32	1.8%	6.7%
San Diego	160.22	1.5%	10.8%
San Francisco	136.74	1.5%	16.2%

Portland is not a particularly bad market, nor is it particularly good and I don't expect this to change any time soon. I think, as I have said before, that we are like to go through all of 2010 without too much appreciation or depreciation.  The new home buyer tax credit will expire, but the summer season will pick up and long-term mortgage rates are still incredibly low (helped now, ironically, by the troubles in Europe as the Dollar becomes a safer bet than the Euro), however unemployment will continue to depress housing. Which all means it is about as good a time to buy as you are likely to see in your lifetime as long as you are in it for the long -term.